Weight Watchers International Inc. tumbled as much as 25 percent in late trading after a high-profile partnership with Oprah Winfrey failed to reverse its financial decline last quarter.
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Weight Watchers, a company that assigns arbitrary points to foods many of us enjoy, had shares fall 22 percent during their fourth quarter.
The New York-based firm posted a fourth-quarter loss of $11.3mln, or 18 cents per share, compared to a profit of $4.4mln, or 8 cents per share, a year earlier. The company earned $259.20 million during the quarter, compared to analysts’ expectations of $257.21 million. It posted a loss of $0.03 per share, which missed the analysts’ $0.02 earnings per share (EPS) estimate. Given that the stock’s average daily volume over the last month has been 4.44 million shares a day, this represents a pretty substantial spike over the norm. The firm maintained its “equal weight” rating on the stock. The four analysts polled by Zacks Investment Research expected earnings of 2 U.S. cents per share. Finally, Craig Hallum raised their price objective on shares of Weight Watchers International from $20.00 to $28.00 and gave the company a “buy” rating in a research note on Friday, November 6th.
Separately, TheStreet Ratings Team has a “Sell” rating with a score of D+ on the stock. The stock now has a consensus rating of “Hold” and a consensus price target of $15.69. After the recent increase, investors may also look to see if the stock has entered overbought territory and could possibly ripe for a pullback. Clearline Capital LP bought a new stake in Weight Watchers International during the fourth quarter valued at approximately $36,826,000.
Weight Watchers’ loss was a surprise. Weight Watchers has been dealing with a secular change in the diet business that directly affects its business model.
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Many Wall Street Analysts have commented on Weight Watchers International. The company operates globally through a network of Company-owned and franchise operations. Another 1.39 million people subscribed to Weight Watchers online program, down from 1.74 million in December 2013. Weight Management Plans provides weight management program comprised of nutritional exercise and behavioral tools and approaches.
